The hidden value of brand PPC

Chris Redhead

Digital Media Manager

‘Are we paying for traffic that we could just get for free anyway?’

If you’ve been involved in discussions around brand PPC, you will likely have heard this question asked in a meeting – or may even have asked it yourself. The effectiveness of bidding on brand keywords (or non-brand keywords with top organic rankings) has long been one of the most contentious debates in paid search.

Many brands harbour a suspicion that it’s all a waste of money – if you took away the ads, you’d simply get the same volume of traffic for free, because searchers would just click on your organic results instead. According to this line of thinking, the ads bring no new revenue of their own, they just cannibalise organic revenue.

Ultimately though, few businesses are willing to put this theory to the test. Pausing all the brand ads for a few months to assess the impact on the bottom line is seen as too great a risk, despite what their hunches might tell them.

Earlier this year, we were given the opportunity to perform exactly this experiment for a client of ours, who was determined to understand the extent to which PPC was cannibalising their organic sales - in order to help them plan future allocations of budget across channels. The results were striking, with the data giving a strong account of the importance of brand PPC in driving incremental search revenue.

Experiment

Our experiment was simple – for each of the client’s websites (all separately branded ecommerce sites in the home furnishings sector), we paused all brand bidding across Google and Bing for three months. We also paused bidding on all non-brand keywords with an average organic ranking of #1 or #2. During this time only Shopping ads and keywords ranked position #3 or lower organically remained live.
The aim was to assess the difference in our share of search once the ads were paused, measured by the combined click through rate of our PPC ads and organic results. If brand PPC was merely cannibalising organic, we would see organic pick up all the traffic PPC had been previously taking, and we would see no change in our share of search.

Results

By comparing share of search during the three months of our experiment with that of the prior three months, we were able to draw some clear conclusions on the effect of pausing PPC ads and how this impacts on organic traffic.

1. Brand ads

As expected, when turning off the PPC brand ads we saw an increase in organic clicks (+20%) – evidence that a certain degree of cannibalisation of organic traffic by paid ads had been taking place.
However, this organic increase did not get close to matching the volume of clicks lost as a result of turning the ads off. Our share of search was down 18% during the experiment period compared with the months prior.

2. Non-brand ads

The same story was evident for the non-brand keywords we paused (those with position #1-2 organic rankings). Organic clicks rose by 22% when PPC ads were turned off. Once again though, the increase in organic clicks did not get close to making up for the shortfall caused by the loss of paid traffic – share of search was down by 28%.

Conclusions

The results of our experiment were unequivocal. For each account and each keyword, share of search fell dramatically as a result of the ads being removed. The clear takeaway from both the brand and non-brand keywords we looked at was that organic listings alone (even if they were position #1-2) were simply not capable of driving the same volume of search traffic as PPC ads and organic results could when acting in tandem.

We combined our figures on estimated lost clicks with our knowledge of value per click for each site (based on historical data), to estimate the impact our 3 month experiment had made on revenue. We discovered that the savings we’d made on ad spend were dwarfed by the estimated loss of revenue we’d experienced from the lost clicks. The savings were calculated to be less than 4% of the estimated lost revenue.

The message for brands is that to maximise share of search for your brand and high ranking organic keywords, you cannot simply rely on organic results alone – and this is particularly true in competitive sectors such as homewares and home furnishings. A well-optimised PPC campaign working in tandem with SEO will always be the best approach for a brand looking to dominate search for any keyword (including your own brand terms).